Inform Phase

Question 1

Three capabilities used heavily during the Inform phase are in the Domains:

Answer 1

Understand Cloud Usage & Cost

Quantify Business Value

Manage the FinOps Practice

Question 1

Two FinOps Principles supported during Inform phase

Answer 1

Everyone takes ownership for their cloud usage

FinOps reports should be accessible and timely

Question 2

Inform: T/F: The inform phase is executing once

Answer 2

False. The on-demand and elastic nature of the cloud, coupled with complex pricing discounts, requires organizations to continuously revisit the Inform phase to understand how they are currently performing, in order to support data-driven business decisions to improve value in later phases.

Question 3

Inform: What is the UI of FinOps

Answer 3

The reports and dashboards created by FinOps Team

Question 4

Inform: Treat your reports and data as

Answer 4

Production

Question 5

Inform: T/F: People don’t get much use from Self-Service Reporting

Answer 5

False. Engineering in particular

Question 6

Inform: Adopting FOCUS

Answer 6

will enable you to align around a common lexicon, utilize FinOps Use Cases to run queries, and build confidence and trust with personas around data

Question 7

Inform: Type of Cost Metrics (4)

Answer 7

List Cost
Effective Cost
Billed Cost
Contracted Cost

Question 8

Inform: List cost

Answer 8

List Cost: Cost calculated by multiplying List Unit Price and the corresponding Pricing Quantity

Question 9

Inform: Effective Cost

Answer 9

effective Cost: Cost inclusive of the impacts of all reduced rates and discounts, augmented with the amortization of relevant purchases (one-time or recurring) paid to cover future eligible charges

Question 10

Inform: Billed Cost

Answer 10

Billed Cost: A charge serving as the basis for invoicing, inclusive of all reduced rates and discounts while excluding the amortization of upfront charges (one-time or recurring)

Question 11

Inform: Contracted Cost

Answer 11

Contracted Cost: Cost calculated by multiplying the Contracted Unit Price and the corresponding Pricing Quantity

Question 12

TF Inform: you should use only one Anomaly Detection Method

Answer 12

False. Various altering methods work in different scenarios.

Question 13

Inform: Examples of Maturity Phases

Answer 13

Crawl: Understand anomalies happen, manual checks
Walk: Begin using some automated detection, reporting, tooling
Run: Alerting integration, auto routing to teams, post-mortems

Question 14

Inform: As a practitioner, it is your responsibility to understand your organization’s cloud efficiency goals and work with other FinOps Personas to translate those goals into benchmarks like KPIs and unit metrics. As you benchmark, work to develop KPIs that make sense to compare against one another

Question 15

Inform: Different benchmarks will measure …

Answer 15

the performance of different teams.

Question 16

Inform: Sample KPIs from the FinOps KPI library(opens in a new tab) that can be used when benchmarking.

Answer 16

Hourly Cost per CPU Core: Measures the average cost per CPU core - link(opens in a new tab)
Percent of Compute Spend Covered by Commitment-Based Discounts: measures the percentage of compute cost (excluding Spot) covered by the commitment-based discount for the previous month - link(opens in a new tab)
ETL Processing Time: measures the cycle time taken to complete the ETL (Extract, Transform, Load) processes - link

Question 17

Inform: Benchmarking Maturity Examples

Answer 17

Crawl: Identify KPIs as benchmarks
Walk:Empower teams to compare their performance to others with self-serve information
Run: Identify and manage a curated set of KPIs and unit metrics to benchmark at a variety of levels

Question 18

Inform: Cost allocation (or cost attribution) is the most…

Answer 18

important thing you will do as someone involved in FinOps

Question 19

Inform: With cost allocation you can…

Answer 19

…begin to individually trend each team’s forecasted growth (versus the whole company’s spend) and set budgets for teams so they know how they are doing against their targets.

Question 20

Inform: The principal mechanisms for allocating cloud cost are dividing usage into two:

Answer 20

Resource-level metadata-like tags (AWS, Azure, or Google Cloud) or labels (Google Cloud only). This is a tag-based approach.

AWS accounts, Google Cloud projects, Azure subscriptions or resource groups

Question 21

Inform: cost allocation…if you are going to start with only one strategy, use this one

Answer 21

Hierarchy (accounts subscriptions, etc). Manadory, less granular, etc

Question 22

Inform: By combining both a hierarchy-based and a tag-based strategy, you can…

Answer 22

use tags for the fine-grained details while using the hierarchy-based strategy to catch the remaining unallocated costs.

Question 23

Inform: To successfully build a tag- and/or hierarchy-based allocation strategy within your organization, you must do three key things.

Answer 23

Communicate your plan
Keep it Simple
Formulate your questions

Question 24

Inform: Three ways to handle shared costs

Answer 24

Proportional: Based on relative percentage of direct costs

*
Even split: Split the total amount evenly across targets

*
Fixed: User-defined coefficient (the sum of coefficients needs to be 100%)

Question 25

Inform: Showback vs chargeback

Answer 25

Showback: show teams what they are spending, but the dollars are allocated internally from a central budget.
Chargeback: happens when the actual cost being incurred is allocated back to the budget or profit and loss (P&L) of an individual team

Question 26

Inform: Chargeback reports are MECE

Answer 26

They are mutually exclusive and collectively exhaustive (sometimes referred to as MECE, in other words, if you add up all the chargeback reports, they will equal all of your cloud spend)

Question 27

Inform: Chargeback Maturity Examples

Answer 27

Crawl:Consistently post and share chargeback data for the finance, FinOps, and accounting teams
Walk: Ensure finance, FinOps, and accounting are actively collaborating on decisions related to maturing the chargeback file, level of detail, and determining initial strategy for shared cost charges
Run:Empower finance to be self-sufficient in reconciling spend or answering questions regarding chargeback without intervention from the FinOps team. Fully automate chargeback data each month into the financial system with the ability to support charging, mark-ups, and allocation both in advance and in arrears

Question 28

Inform: When finance, engineering, and leadership build models to forecast cloud spend reliably and accurately,

Answer 28

cloud cost forecasting will inform investment and operational decisions to accelerate an organization’s growth.

Question 29

Inform: Forecasting maturity

Answer 29

Crawl: Create manual and/or ad-hoc forecast models
Walk: Update forecast on a regular cadence
Run: Generate forecast models that are a combination of rolling, trend-based and driver-based

Question 30

Inform: You will get better at budgeting if you do it weekly and assess your results. Forecasting and budgeting are like any other skill. Practice now before the annual budget cycle so you get a feel for it and start to build your skills!

Question 31

TF Inform: Finops is about saving money

Answer 31

False. It’s about creating value.

Question 32

Inform: Finops often gets pushback on general sitdown reviews of spend. Do this instead

Answer 32

Give teams cost targets or goals.

Question 33

Inform: Four levels of budgeting

Answer 33

No one is budgeting at all.

Spend what you did last year.

Create a cost “takeout” goal. This type of budgeting looks at the forecasted spend from a rolling forecast and then reduces it by a prescribed amount. This can provide the right incentives to teams, but they’re often arbitrary and not tied to any specific business outcome.

Use unit economics and performance metrics.

Question 34

Inform: Budgeting maturity

Answer 34

Crawl: Review and use forecasts to create budgets manually
Walk:Establish budget cycles on a regular cadence but not automated
Run:Institute complex forecast models aggregated from many system or application teams to create forecasts using a variety of metrics and parameters